Priceline Winning The Online Ad Game

Piper Jaffray performed a survey of paid search advertising placement for hotels on local search engines in 63 countries around the world, which showed that 82% of searches in developing countries had at least one advertisement for a Priceline PCLN owned site. 62% of searches had at least one advertisement for an Expedia EXPEowned site and just 6% of searches had an advertisement for an Orbitz OWW owned site. PCLN remains the top pick among OTAs given we believe earnings growth of ~30% annually is achievable over the next several years. Risks to the online travel agencies include competition, supplier and metasearch share gains, slowing growth, rising customer acquisition costs, geopolitical instability. PCLN closed Wednesday at $332.69 EXPE closed Wednesday at $27.70 OWW closed Wednesday at $6.36